At a time when most job entrants have no pensions choice but defined contribution plans, with an uncertain level of payout, one big City employer still offers a scheme with guaranteed benefits and is pouring in extra cash to keep it as safe as, well, the Bank of England.

The Bank increased the top-up of its defined benefit scheme by £13 million in 2014-2015, putting in £87 million against £74 million the year before, according to the scheme’s latest accounts, released in August.

This made the Bank’s annual contribution equal to 50.4% of payroll, against the 10.1% the average FTSE 100 employer pays into a DC scheme, according to Towers Watson. The latest top-up, paid for by the taxpayer, means the scheme is fully funded.

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If a DB scheme stays open to new staff with interest rates so low, the “logical result” is that full funding needs generous top-ups, according to Kevin Wesbroom, principal consultant of AonHewitt.
Last September Ros Altmann, who has since become pensions minister, said: “How many other employers could afford to contribute an extra 50% for their staff pensions?”

A spokesman for the Bank said it set “very prudent” pension funding standards that resulted in “realistic costs” being reflected in its annual payments. He added the Bank’s final salary scheme was closed to new joiners and had been replaced by an “average salary” scheme, which would bring costs down over time.